Legacy obligations, which include pension contributions and benefit payments, take an additional 39 percent of revenue. That leaves little to invest in the failing infrastructure.
Pensions are hardly Detroit's only hurdle. The city throws plenty of money at its schools, which are beholden to the powerful Detroit Federation of Teachers, spending more than $14,000 a student annually.
Yet little value is received in return: In 2009, Detroit public-school students turned in the lowest scores ever recorded in the national math-proficiency test. More than a third of students fail to graduate.
In many ways, Detroit is a model of tax-and-spend liberalism.
The city's per-capita tax burden is the highest in Michigan. Detroit has the country's highest property taxes on homes, the top commercial property tax and the second-highest industrial property tax.
The city's income tax - 2.4 percent for residents, 1.2 percent for nonresidents and 2 percent for businesses - is the highest in Michigan.
The income tax burden on residents is significantly higher than that for those who live in the surrounding area, which helps drive more affluent and successful residents out of the city.
And Detroit is the only city in Michigan that has an excise tax on utility users.
Besides the anti-business taxes, there are the anti-business regulations. The city imposes a "living wage" of $11.03 an hour ($13.78 an hour if other benefits aren't provided) for public employees, as well as on businesses that contract with the city.
This year, Detroit started a campaign against businesses that don't meet the city's voluminous licensing requirements, promising to shut some 1,500 "illegal" ventures such as tire shops and secondhand appliance stores operating out of abandoned warehouses.
This sector makes up almost a 10th of businesses operating in the city and serves almost 70 percent of residents. The official policy is to crush these operations.
A few years ago, the nonpartisan Bay Area Center for Voting Research rated Detroit as the most liberal city in America.
The city's own choices, not free markets and limited government, are really responsible for Detroit's failure.
Tanner is a senior fellow at the Cato Institute and author of "Leviathan on the Right: How Big-Government Conservatism Brought Down the Republican Revolution." His column was distributed by Bloomberg News.